Covid-19: India unable to take full advantage of drop in oil prices

India, the world’s third-biggest oil consumer, is unable to take full advantage of a slump in global crude prices because of a steep drop in the sale of petrol and diesel in the aftermath of the nationwide lockdown for the coronavirus disease (Covid-19) that has squeezed dealers’ margins and put at risk the jobs of some of the 500,000 people employed at fuel stations.

Sales of automobile fuels have slumped by around 80% in the cities and 60% in rural areas since March 25, when the lockdown went underway, taking public transport and private vehicles off the roads, according to dealers HT spoke to.

“The spread of the coronavirus and the lockdown have affected everyone. If demand does not pick up this month, we would face difficulties in paying salaries to staff,” a Noida-based dealer said, requesting anonymity.

A Mumbai-based dealer said he had been forced to shut his petrol pump in the heart of the city for the time being because of both lack of demand and absence of staff to serve any customers who turn up amid the lockdown.

“My other retail outlet at Ulhasnagar [on the outskirts of Mumbai] is open, but sales are a minuscule 500 litres a day compared to from 450 KL [kilolitres] earlier,” the dealer said requesting anonymity. 1 KL is equal to 1,000 litres.

“I have taken Rs 50 lakh credit from bank. I have fuels in tanks worth Rs 50 lakh. Unless I can sell fuels, I would not be able to service my debt,” he said.

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